Guthard v. Guthard (Nebraska 2020)
Determining income for child support for a parent who is a shareholder in a corporation is a fact specific determination. The mother filed to modify child support alleging that the father’s income had increased substantially. The father was a 50 percent shareholder in an S corporation. The mother argued the Father’s child support income should include his salary, the earnings retained by the corporation, distributions meant to cover taxes, and rental income from another business. The trial court denied the modification, and the mother appealed. The appellate court affirmed the order. It found determining income for parents in this situation is case by case decision. For retained earnings to be income, they must be excessive or inappropriate with the moving party bearing the initial burden of proof. The submission of a parent’s personal tax return and the shareholder’s K-1 isn’t enough alone enough to meet the burden. The mother provided no additional evidence regarding the excessive or inappropriateness of the company retaining the earnings. The court also noted that it decided, in an opinion released on the same day, that distributions meant to cover tax liability were not always income for child support. These distributions could be under certain circumstances, but in the facts before this court, the distributions were appropriately excluded.